pretty good. ♪ >> and then of course, "varney & company" just a minute and a half away. yeah. lying limey and chuck payne here. foo fighters. ♪ ♪ ♪

♪ imus in the morning ♪ >> one month after sandy hook. where are we now? the gun debate, the big issue as we start the new week. good morning, everyone. several developments, a break-in at a home where a newspaper had published the name and address of a gun owner. gun sales soaring, protests at gun shows. a senator calls for a voluntary sales halt and maybe a power grab. gun control via executive order. all right, power grab number two, nancy pelosi says the president should bypass congress and invoke the constitution's

14th amendment. that would be a blank check for the the oval office. power grab three, it's smartphones, the galaxy and the lumia make big moves, and apple stock sinks to right around $500. "varney & company" about to begin. [ male announcer ] this is joe woods' first day of work. and his new boss told him twongs -- cook what you love, and save your money. joe doesn't know it yet, but he'll wk his way up from busser to waiter to chef before opening a restaurant specializing in fish and me from the great northwest. he'll start investing early, he'll find some good people to help guide him, nd he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade.

>> monday, january 14th, the big story all about guns still. developments coming thick and fast. the new york suburban newspaper published the addresses of gun permit holdings now, two robbery suspects reportedly targeted a gun safe at a home identified in the paper. one new york state lawmaker cites a report that the burglars may have picked the home because they knew it had guns. one suspect in custody. in washington, senator chuck schumer has asked all major gun owners retailers-- gun retailers i should say, to

stop sales. >> the n.r.a. is not backing down. after calling for armed guards in schools, released an iphone app, practice range, uses a four and up, gives people access to the organize's legal resources. latest news, safety tips and includes a mini game that lets users test virtual guns. signs of decisions, saratoga springs, new york, went ahead with a gun show over the weekend. thee anti-gun protests, one pro demonstration, did not stop people from showing up. record attendance. and tomorrow, vice-president biden expect today deliver gun control recommendations, three measures expected, one, limit high capacity magazines, two, universal background checks and three, an assault weapons ban. an executive order bypassing congress is possible on any of these measures. this is a contentious debate. remember this? piers morgan. >> i honestly don't understand

why you would rather have people be victims of a crime than be able to defend themselves? it's incomprehensible. >> you're an unbelievably stupid man, aren't you. stuart: you heard that, at 10:35 we have a representative from that organization morgan was calling stupid. we'll see what turns up. but at 10:35 this morning we will have mr. pratt on this program. got it. now to the debt debate. it's turned into a power grab, leading democrats in both houses of congress urging president obama to use the he 14th amendment to bypass congress and go over the debt ceiling. here is what nancy pelosi said about it, and i'm quoting directly, i would use the 14th amendment. which said that the united states will always be paying. i would just go do it. the judge weighs in on the 14th amendment later this hour and coming up right after the opening bell, we'll have art laffer with us, former reagan economic advisor. what happens if we ignore the

debt ceiling? i've got big news and a major hit for apple's iphone. weak demand forces the company to cut orders. samsung is the new kid on the block with the galaxy. find out how apple opens after the upcoming break and congress says that climate change is it here and it's our fault. is a carbon tax coming? yeah, art laffer on that, too, apple may be below 500 bucks a share, we'll tell you. we've got it all. [ male announcer ] you are a business pro.

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>> we're coming right up on the opening bell. this monday morning, we're expecting stocks to go down just a little in the opening. a very small amount, and the well has stopped ringing and that means we're open for business. what's the opening trend, he asks? up very slightly. we'll see how that pans out. you're not looking for a big movement in either direction, at least in the very, very early going today. remember, please, president obama holds a press conference at 11:15 eastern. maybe that moves the market, there could be changes there. demand for the iphone not as strong. apple cuts orders for components of the iphone 5. nicole, first question, obviously, has apple dropped-- no, 501. >> 501.67. some of the traders i've been

talking with, 495 is the place where you're probably going to see it hold up. that's the next level of support according to mark over at gray wolf. stuart: we're making a big deal out of this, nicole, virtually any investors holds a little bit of apple, whether directly through an index fund, a mutual fund, most people in the market have money in apple and to see it drop boo he lowelow $500 is d headline. >> 501 at of the opening bell. >> and here is where it's not. 700 like it was. stuart: well said, well said. we'll be back in a second. let's check in one out, all right. nicole. compare this chart. nokia and apple. top line nokia, this one is worth it. and nokia shares are beating apple into the ground.

remember, apple's iphone is losing ground to competitors like the samsung galaxy and google's nexus 7, nokia does well in emerging markets, that's the chart that shows you. we've got democrats in the house and senate urging president obama to use the 14th amendment, bypass congress, just go over that debt ceiling, forget about congress. in other words, congress wants to give the -- in other words, the president wants a blank check without congressional approval. joining us now is art laffer, former advisor to president reagan. art, always a pleasure to have you with us. >> thank you. stuart: i'm going to say, with heavy pressure from nancy pelosi and other very senior democrats, this is an option that the president may well take. what do you say? >> i hope he doesn't. i can't imagine he would do it because it'd really be a disruption for the whole process, but i'm not a legal expert, i don't know whether it's right or not. but frankly, it's been not used for years and years and years and years and years, and i don't

see why we should break tradition now and try some new circumvention that would put total distrust into the process. it doesn't make sense to me. stuart: i'm thinking what kind after message would it send to markets and investors around the world, we're not prepared to get a handle on our spending, that's what it would say. >> if it's correct, stuart, if it's correct, i mean, why didn't they do it sometime when it's not a crisis? i mean, that's when you test the law to see whether it's correct or not so it can be used in the future, not at the moment of crisis management. that's the wrong time to check whether it's legal or not. stuart: now some people are saying, well look, the worst is over for our debt. in a few year's time our debt will top rising as a proportion of our economy and that means we're bailsically stabilizing, we're going to be okay. what do you say to that. >> i hope that's true. that means that economic growth will pick up dramatically and bring tax receipts way up and it

will also bring spending way down awes get people off food stamps, off welfare, off unemployment. the best form of welfare is still a high paying job. stuart: do you believe it? >> i don't think it's true right now, no, i don't think these policies will do it. stuart: not now, obviously, not. debt as a proportion of the economy keeps going up. >> it's bigger and bigger, and the deficit doesn't seem to be getting really teenie tiny either, does it stuart? >> no, just not. 3 1/2 billion extra every single day. >> i know, amazing. stuart: tell me how it actually affects our economic growth rate. how does it it do this? >> well, now, with low, low, low, low, interest rates, it doesn't increase the use of tax receipts it pay interest on the debt. but as interest rates rise, which they will, it will have an enormously deleterious effect on growth rates. it really will and that's what we're worried about, the long run prospects of what this national debt and thereby tax receipts use today pay interest

wi will do. >> i have a new report from congress, climate change is here, watch out, it's affecting us, because we humans, all our economic activity. the report was written by 240 business leaders and scientists found that climate change is having an impact on infrastructure, water supplies, crops, shore lines. art,this surely is a buildup, softening us up to the point where we will accept a carbon tax, is that right? >> it could well be. i'm not an expert on global warming. i consider myself a fairly good friend of al gore's and he is very convinced of global warming and i just don't really know, i'm not a scientist in that area. but if it is a problem and it's caused by humans and if we can change it, i would be in favor of a carbon tax, if it were 100% offset by an income tax rate reduction. my problem with the carbon tax, it destroys economic growth if not offset by a tax rate

reduction. that's what i'd like to see. stuart: i'm with you, but no way we get a carbon tax and simultaneously tax rates come down. no way. >> well, the most amazing thing to me, doing a little research on the economics of a carbon tax. every time al gore mentioned a carbon tax increase and he has, he's mentioned simultaneously, a payroll tax rate reduction that would exactly offset that tax increase which i was sort of amazed at doing that. never missed on that opportunity and all of us on the carbon tax are worried about the damage it will do to the economy and that's where i'm worried and therefore, if they can do an income tax rate reduction, i would be fully, well, go along with them, with a small carbon tax. but if they don't do that, i'm totally oppose today any carbon tax whatsoever that's not offset by a more damaging tax cut. >> you know, art, we didn't know that you were a friend of al gore who just sold-- >> a very nice man, by the way, a neighbor of mine just down the

street and i see him fairly frequently and he's a hell of a neat guy, to be honest with you. stuart: why did you sell a network to al-jazeera and big oil. >> because he got paid 100 million dollars, hello! is that surprising. stuart: as our colleague bernie goldberg said, he hates oil, but loves big oil money in a nutshell. charles: you've got howard metsenberg avoiding-- and john kerry buying a yacht in rhode island. stuart it, happens all over the place and what can i tell you, al gore is a good guy. stuart: we'll leave it there. art. >> my pleasure. stuart: we're going to call this union thuggery in california and by the way it worked. after launching what critics call a campaign of intimidation, the police union in stockton, california got its way, no changes to pensions.

coming up, new at 10, find out what they did to get their way, how much they got and how much it will cost. that comes up top of the coming hour. i've got two big names that you know for you right now. first off, it's facebook. it's holding that mystery event tomorrow in silicon valley headquarters. so, nicole, i don't think we know what it's all about, but i do know the stock is up. >> that's right, and certainly been running up since basically the middle of summer. look it, basically around $32, closer to $38 ipo price, tomorrow is the day, it says come and see what we're building, is it a phone, an app, about mobile ad revenue, a building? what is it? in the meantime, it's running up and deutche bank is loving facebook and put a $40 price target on facebook. stuart: $40 from deutche bank, right. >> yeah. stuart: i've got another stock, please do not put this on the air one second. i want it talk about toyota, new man in japan, he's going to

print the money, print up a storm and trying to get the yen down. i think that should be good news for toyota and i'm expecting to see toyota stock up this morning. all right. now let's see where we are. i can't see here. >> i love when you guess, you do like a crystal ball and you're like-- it's up, it's up, you've got it, up about 3/4 of 1%, swammy varney. [laughter] one of the reasons, yes, weaker yen always helps the company like toyota. coupled with the fact that they got the crown back. and this is the big one here. toyota retaking the global auto sales crown from general motors. volkswagen, by the way, has been nipping at general motors, but volkswagen is at number three. stuart: interesting, interesting, so, from the swammy himself. nicole, thank you very much indeed. great stuff. the dow is up 4, told you flat opening. let's get to seven early movers this monday morning. what have we got today? yesterday oracle released an emergency update to its java

software for surfing the web. experts say bugs remain. unchanged. hand bag maker vera bradley resigned. and apple could cut lcd panel orders for iphone 5, weak demand. apple is way, way down, did trade this morning at 500 even a couple of minutes ago, we've got ups dropping its 7 billion dollar bid for the dutch delivery firm tnt express. ups is up and tnt express where is that, i presume it's down. yes, sir, it's down big time, 41%. and don't forget, dutch mail company post nl, it's got a 30% stake in tnt and that, of course, is down. japan's transport ministry launched an investigation into what caused two fuel leaks in the 787 dreamliner, owned by japan airlines and the boeing stock goes back to $75 a share as of right now. and you'll be hearing a lot

about the 14th amendment this week, and democrats urging the president to use it. ignore the debt ceiling, get out there and spend and borrow. can the president do that? the judge is with us next. [ male announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want

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>> thousands of michigan residents lined up for low income housing vouchers in a detroit area community. chaos very quickly erupted. fights broke out. police had to intervene. here is the reaction from some of the attendees after the police finally got things under control. >> next thing you know, the lights go out and people started

going crazy and they're going to cancel it. >> out here, old people, pregnant women, it was unfair. >> it was ridiculous, i don't understand what they expected. >> welsh the event was eventually canceled and four arrests were made. let's get back to the debt power grab. and call to president obama to step around congress, and increase the debt ceiling simply by using the 14th amendment to the constitution. you know who is here. i mentioned the word constitution and it's got to be judge andrew napolitano. >> good morning, stuart, happy monday. stuart: what you may not have been expecting was that i would have my trusty u.s. constitution in hand. >> not surprised, in fact, quite pleased. stuart: i'm sure you are. section 4 of the 14th amendment, the validity of the public the debt of the united states shall shot be questioned. is that sufficient authority for the president of the united states to say, don't you question our debt. we're going to raise the ceiling period. >> absolutely not. stuart: it's not. >> no, because the constitution

itself says that only congress with raise money, only congress can spend money, and only congress can borrow money. the president knows that. every single president from w d woodrow wilson to barack obama when they want to raise money, when at the wanted to raise money, congress needed approve each and every one, and the identity of the person with the loans, from 1979 congress has said, okay, you can borrow another 25 billion and divide it up and get the money however you want. and the president knows that. that phrase and the public debt for the united states shall not be questioned, has this historical context. the 14th amendment is one of the three post civil war amendments. so, in order for the seceding southern states to return to the union, they had to agree to adopt the 13th, 14th and 15th amendments. the 14th amendment says, the

public debt in the united states shall not be questioned because one of the debts that the federal government still had to pay after the civil war, was the debt incurred by fighting the civil war. stuart: okay. >> who is going to pay that? the returning southern states as well as the northern states. stuart: that locked them in. >> correct, it prevented them from saying we're not going to pay our assessment, in a pre-income tax era, a blessed era in american history, free income tax, when the feds needed money they assessed states, based on the population of the states and prevented the southern states from saying we're not going to comply with this assessment because this is to pay vendors who sold you material that you used to attack us with. it prevented them from that. stuart: real fast. this is an end run around congress, is it not. if the president-- >> if it were to happen, it would be a profound end-run around congress and i would ask you, who would lend money to the united states of america without the full faith and credit of the government to promise to pay it back, it's just the president's

promise. he's not going to be president forever. stuart: he was sent an extremely negative message to investments and governments around the world that the president has taken a black blank check for the white house and this president is in a spending mood. it would send a terrible message around the world. >> this is a political threat. stuart: so you think it's just a threat. if push comes to shove, last minute. do you think the president will do it it, yes or no. >> no, i don't think he will do it. it would wreak havoc on the bound market. it would be profoundly unlawful. the promise to repay wouldn't be worth the paper it wasn't written on. the president can't issue a note on his own. the constitution couldn't be clearer. stuart: judge. >> now, the question is when is the last time mrs. pelosi and company read the constitution? >> i have no answer to that question whatsoever. judge, thank you very much indeed. happy to have you on the show a bit earlier. >> appreciate it. stuart: time for your morning gold report. where are we? up ten bucks early and now 460,

1665. what happens if the president invokes the 14th amendment. i bet gold goes up then. >> interesting. stuart: a big question. and he's one of the most controversial figures in sports. no matter your opinion of lance arm strong he will supposedly come clean to oprah this week admit he cheated. and liz and charles are here, will they forgive and forget mr. armstrong. ♪ i want a new drug, one that won't make me sick ♪ ♪ wasn't make me crash my car and feel six feet six ♪ what are you doing?

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>> lance armstrong ready to come clean today. he caped an interview with oprah winfrey. he was stripped of seven tour de france titles and barred from competition after the u.s. doping agency said armstrong had quote, led the most sophisticated professional and successful doping program that sports had ever seen, that's quite an indictment. and armstrong has reportedly been making calls to apologize and he was calling before he arrived for the the oprah interview. that will air on thursday. would you forgive and for get,

charles payne. charles: absolutely not, i would wait and not sure how genuine this is. this helps to recognizance resurrect his career. stuart: he's 40. charles: one of the reasons he's doing this, all of a sudden it a an epiphany, woke up in the middle of the night in a cold sweat. he got caught. stuart: the fundamental question, can this man's reputation, can his person be rehabilitated, yes? >> i think everybody can, but i don't think the public is ready to forgive him just yet. athletes who cheat is no longer the status quo anymore, we've seen it with the baseball steroids scandal ap the hall of fame, excluding the athletes last week and the other issue, oprah winfrey no longer is a powerful cultural force she has been in image rehab and see that with the ratings on her own show and network. charles: and we had this discussion a couple of years ago, when cris carter brought up

the point with cancer and get an out because of the work he's done with that and a lot of people will consider that as well. so, i think for the most part, as time goes on, he will be somewhat forgiven, but never considered the heroic person he was before. stuart: never again. >> never again. stuart: all right, everyone, new at 10, the company weighs in on the debt power grab and possible use of the 14th amendment. eric bolling will be here as well. a star-studded hour of "varney & company" is just ahead for you.

♪ >> new at ten, union thuggery wins in stockton, california where the police union proposed cuts to pensions by putting up be billboard with a city matching phone number and buying a house next door to his making outrageous noise. those pensions will not be cut afterall. one of the top voices from california joins us at 10:15 this morning. top of this hour, leading democrats in both houses putting president obama, yes, invoke the 14th amendment, ignore the debt ceiling, get around congress. one month after the sandy hook massacre, the gun control debate grips america. several new developments today.

a leading gun rights advocate joins us later this hour. the big board, a half hour into the session thus far down 23 points. that's it. here's the company. elizabeth back, charles payne is here, annie coal is always -- and nicole on the floor of the new york stock exchange. get this, everybody, apple dipped blow $500 a share, but where is it now, nicole? >> first time in 11 months, back to february of last year, back above $500. the traders talked about the fact that $495 is a good pickup point for happen l. they are cutting demand for screens and components and pieces for the iphone5 because they are not seeing the demand they hoped. >> that's the story? that's what behind the drop today. there's been a cut in their orders for the components that make the iphone5. that's the basis for this 18-point drop for apple; right?

>> it is. you know, intense competition. one product or another. my mind go to rim. i can't wait to see the blackberry 10 on the 30th. it's the realm. >> extraordinary numbers with galaxy phones sold, 100 million or something, way, way up there. thanks, nicole. back with you on apple shortly. another big story today, leading democrats want president obama to by pass congress and go right over the debt ceiling, just borrow and spend. here's what nancy pelosi had to say on "face the nation," and this is a direct quote. "i would use the 14th amendment which says the united states will always be paying. i would just go do it." look who's here. co-host of the slam dunk winner, "the five," and he is here. eric, welcome to the program. >> thank you. and company. >> what do you say?

>> not surprised. nancy pelosi saying, go ahead. she said pass the health care bill and then find out what's in it. bypassing congress -- congress has been the checkbook. they start the money bills in congress. send them over to the senate. you can't do it. president obama is the guy, when he was senator obama, who called george bush's debt unpatriotic. if i'm not mistaken, correct me, but there was a time he voted against raising the debt ceiling. president obama is in a very, very interesting predictment right now. by the way, in an hour and ten minutes or so, he's going to address the debt ceiling and what he plans to do, what he wants to do with the debt limit. my guess is, though, she can say -- congresswoman pelosi says what she wants, but they need approval to raise it. >> you don't think he would do in >> that would be the legacy he doesn't want. a lot of people say he likes to go around congress with the stimulus, regulations, and epa,

going around congress, with the cap-and-trade stuff, and for him to do that with the debt ceiling, as important as the debt ceiling, that's politically very difficult. >> you're joining the judge on the show just five or ten minutes ago saying the same thing, probably not going to do this. charles, what do you say? do it or not? >> i don't think so. they would have done it last time. >> liz? >> congress has the power, not the president. >> look, here's what you have got then. the trillion dollar coin is dead. the treasury's not going to do it. we all think the president will not invoke the 14th amendment meaning he's got to get a deal with congress. >> right. >> to raise the debt ceiling. he says he's not negotiates with congress to raise the debt ceiling, and the congress says you ain't beginning to get anymore money unless you cut spending, and he won't cut spending. >> what eric talked about, going on a public relations campaign. it's a whistle stop thing, come on tv every day as it gets closer and closer saying these republicans are ready to kill

this congress. >> straighten something out. if we go over the debt ceiling, run -- >> we have already. >> we don't default, do we? we do not default. >> we don't ever really default. we can always continue to pay the bills, print the money. >> tax money comes in. >> talk politically. president obama will stump and campaign saying it will be unpay patriotic for the republicans to not raise a debt ceiling after he's already said it's unpatriotic to exceed the debt ceiling in 2007-2008. he's in a very, very tough place. i think the republicans in the house in congress will give him a hard time, won't make it an easy checkbook. they'll ask for something in return, not sure what it's going to be. they'll probably get it, some negotiation, but, again, we already exceed the debt ceiling. $16.4 trillion tim geithner, fudges numbers around, pay the bills until congress signs the increase in debt ceiling.

>> a repeat of the fiscal cliff? >> that's what politics is in dc. this is all games, all threats, all the clock is ticking down. makes you worry if the country's going to default. >> eric, here's the thing -- >> at the end of the day, sorry -- >> yeah. at the enof the day, there's a deal. >> yeah, this is like the debt ceiling is a phony argument. it's really about charter renewal. it's a renewal of a charter do continue spending, and what time and again the american people have been misled on the debt ceiling, what we are talking about you can't default. the government can't default on the debt or paying china and the like, what's bad is entitlement reform. you can. >> but he won't. >> that's not covered by the debt ceiling. >> the president loathes to cut spending of any kind. he wants more spending, in fact, and under no circumstances will he touch medicare, medicaid, social security. agree with that? >> surprised if he touchedded them if there's no real

substantive cuts. the only way to cut the diset would be to hit those. i don't think he will. think about this. if simpson-bowles was enacted two years ago or now, if it had, ten years down the road, debt to gdp would be 65%. livable. in greece, it's 100 and change. the other european countries it approaches a hundred. if we do nothing including the new deal putting put together, t 79-point something percent to gdp. if they do sequestering, that's 70%. there's -- we're moving in the right direction, but president obama definitely has to if he wants the number down to a liven number, a healthy economy, he has to address those, but likely won't. >> one last one, you were wearing an american flag. are you happy with the new america? >> i don't think the america

that i know has ever changed, and that flag will always remain right there. >> okay. eric, what a pleasure. will you come again? >> i will. >> on a regular basis? >> i'd love to. the best money show on television by the way. >> wow, all right. would you just stay there for a second. i got to read another story, and i want your opinion on it. hold on for a second, please, eric. i'm moving to thee big story of the day, guns, the gun control debate. a few weeks after one suburban newspaper published the addresses of thousands of gun permit holders, a home was burglarized. the robbers allegedly targeted the homeowners gun safe. they were up able to get it open by the way. eric, your reaction to this? >> not surprising. we talked about that when the journal news published that map, that, you know, said on television, i own a rifle. i own a handgun, they are registered, and if you put my

name and address saying this house is protected, by the way, and it's my neighbor who wouldn't like it. if my house is protected and no red dot next door. they went after the guns, i know, but here's the point, charles -- >> you are on the set -- the house is empy. >> try to rob my gun, go ahead. you'll catch the browning. >> there's no proof between the story and the burglary. >> still, but be honest with you, one of our -- one the reporters for greta was going after the editor, the editor of the journal news who printed that map, and what they found was that he was talking to people on the block that she lived, even people with guns, and the people on the block she lived with guns were concerned about that very thing, that their houses would be targeted for thieves who wanted to steal their give ups and use them in robberies or whatever. i get it. i think i still, again, you --

more than welcome to publish my name. >> wow. there you have it. a fine pirs performance. eric, thank you very much. >> good to see you. >> good luck, sir. the national rifle association releases a new game for your iphone to test different guns. it's touted as true to life. the game is free. also gives you access to all of the news you need from the nra. got that going for us. meanwhile, senator schumer, he's calling on gun retailers all across the country to stop selling guns until congress passes a new gun control law. later this hour, a leading gun rights advocate from the organization that piers morgan called, quote, unbelievably stupid, with gun owners of america, will be on the show. his proposal of guns may justify, well, look, we'll have him on the show, okay. we'll debate this issue civilly at 10:35 this morning. i want to go back to nicole. coach, i call them that

democratic luxury. stocks up, why? >> looking good today. itch -- up nearly 4%, it is a top performer, best performer on the s&p 500. deutsche bank positive here on coach. the new price target, $67 up from $62. don't forget, it's hitting right around that lev. they are upping it. >> democratic luxury. do you agree with that? affordable luxury products, generally affordable? >> generally affordable, yeah. i'm apprehensive because there's so many things in there, a variety of thing, and i think that you're right. i'm going to go with you being spot on. amazing. >> excellent. don't forget. thank you very much. dow down 14. that's dead flat. more union thugs in california. the stockton police union gets its way after waging a campaign of intimidation to the city manager. no changes in pensions in a city that's broke. we plant our flag in california

next. at a dry cleaner, we replaced people with a machine. what? customers didn't like it. so why do banks do it? hello? hello?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello? ally bank. your money needs an ally.

>> like everybody else, following apple closely this morning. weak demand for the iphone as apple cults orders for the screens. the smart phone battle rivals meeting it. shares below $500 for the first time in about a year, but they are back up to $503, but still

big time down. facebook, that was up earlier. now it's gone down 44 cents, but the deutsche bank upgraded facebook from hold to buy. they said watch out. facebook's going to go to $40 a share. mobile ads help it. we'll see about that. there's a news conference this week, but it's downright now. toyota back on top after out setting general motors. toyota sold 9.7 billion vehicles, and with the yen down, toyota is up at 96. back in a in a moment.

>> virginia's governor wants to replace the gas tax with a sales tax increase of nearly a penny on the dollar. they say more fuel efficient cars means less taxes coming in from gas purchasesment later this hour, how three other states are reforming their tax policies to fit the times. now this. the police union of stock ton, california launched an all out intimidation campaign against the stockton city manager, bob dice. it worked. it began when the manager dice asked the police union to renegotiate pension benefits announcing possible layoffs as well. three monthings later? the police union bought the house next door to dice and started noisy renovations, plastering billboards with his number on it, put a as a rule -- put a bumper sticker on his car. they ruled out pension reform,

and in return, the police will sell the house. we are joined by mark, and i call that successful union thuggery. is that too far? >> no, no, it's played out throughout the state of california and the rest of the nation. we dealt with it for some time. you know, it's interesting there's a law firm out there that represents roughly 120 of the public safety unions around the state of california. i forget the exact name, but it sounds like hao that unfortunately has put on their website the actual play book of intimidation tactics including things like work stoppages, having police officers going in neighborhoods looking for minor crime victim information, and, basically, scaring the public into thinking that if we put less police officers on the street, we don't get pension benefits, it's just more trouble for the cities like stockton. >> they are bankrupt; right?

i think they declared bankruptcy or they are about to, but they are totally insolvent, and police pensions were just one of the reasons why they are insol vent. if they don't release pensions, they pay the same money, hire people, what happens to the city of stockton? >> well, you know, basically, we're looking at a scenario, let's see because i'm in called, i use hollywood as an example. it's bugetgeddon careening towards stockton, but rather than doing the courageous thing to destroy the asteroid, there's bullies trying to force the city manager to move the earth out of the way. you know, we both know that's never going to work, and up fortunately, there's a day of reckoning for coming for stockton and san bernardino they can't avoid anymore. >> what about the state as a whole? governor brown in the state of the states last week said, look, we're finished with the deficit.

we're okay. we're in the black, actually. that's what he said. >> well, yes, if you look at the actual numbers behind that, part of eliminating that budget deficit meant pushing off payments towards bond obligation. they took a couple billion off the back end there, and what's interesting, it's easy to claim there's a budget surplus with $6 billion more of the taxpayers money thanks to prop 30, but hidden in the funding means that the governor's now going to back fill pension payments and salaries to stateupon work ores, and that was not part of the promise. >> that's interesting. this prop 30 raised taxes that was in the november election, and it was back dated to january. they are going to bring in an extra $6 million, and mark, you say some of the extra revenue goes towards paying state worker pensions opposed to reinvigorated the health service or the education system; right? >> yes. it also goes towards eliminating a few of the furlough fridays

that schwarzenegger posted trying to keep the state worker payment problem down, but unfortunately -- >> so california is not on solid footing? it's not returned to sobriety financially. >> not at all. >> not at all? >> no, no. it's all these pie in the sky promises. the other thing not talked about is all of the promises only hold until roughly about july when they have to come up with another budget revision, and it looks like, you know, it's the way california ice standing with the current revenue projections, we'll fall short. what happens then? again, you know, we've gone off the edge of the cliff right now, and here in california, unfortunately, nobodiments to deal with that reality. they are busy picking out what parachute to land in. >> have you considered moving out of state? >> no, no, no. i told you this before. i'm here for the long haul because i'm going to try to turn california from a right to perk state back into a right to work state. >> interesting. mark, pleasure.

thanks for joining us again. appreciate it. >> as always, thank you. >> you want to get into this? i got to tell you, i was in newport beach last week, beautiful place, luxury, doing so well economically, but you were also in california in a different side of things sks right? in bad shape. >> rodeo drive, take a left, tons of empty store fronts, hollywood is ugly. it's a place that has haves and have-notes. nothing in between. they continue these nutty laws, but stockton is a prime example. >> that's a chilling story. basically, retiring at age 50 with 90% of the pay is what the cops in stockton still want. i don't know what bond investor will continue to lend to california. the state never learned how to pay from the sprawl. that's the problem. >> thank you, everyone. we cover everything on the

program so now coming up there's this, a major shift in marriage, and just who is having babies. that affects us politically, affects us economically, and i'm going to say it affects us negatively. my take on all of this is next. ♪

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>> cnn host piers morgan calls gun owners of america's larry pratt unbelievably stupid, a representative of mr. pratt's organization will join us in a few minutes. 10:45 this program, this day. my generation, we the baby bomber -- baby boomers have changed social behavior not all for the good. here's my take on marriage and having children. first some really startling numbers. 51% of adults are married, that's it, just half. a generation ago, it was 72%. clearly there's been a huge decline in the numbers getting and staying married. and by the way, the less you are educated, the less likely you are to be married.

as for having children, another shock, 41% of births are to unmarried women. a total reversal of what used to be the norm. and the result is that more than a third of our children are being raised in single parent homes. look, i'm making no moral judgment here. but the shift in our morality has had a big impact. our economy, our financial expectations, and especially our politics have been affected. how do you pay the bills in a single parent family? how do you accumulate wealth? why not ask for help from the government? food stamps, medicaid or cash welfare. why not? why not elect politicians who give you the goodies. that's what we've done. like it or not, the decline in the traditional family affects the vote and it has. and it certainly affects the living standard. and the financial expectations of tens of millions of people. single parenthood is a passport to poverty. it is very difficult to climb up the ladder when you are on your own with children. putting money aside, saving for the future, obviously very

tough. so the morality shift takes its toll on the american dream. it creates a large group, almost a majority who struggle and who lose hope of getting out of the hole that they've dug. i don't have a solution. but i do know this, there is a limit to how long this or any government can step in and help. that help may be making the problem worse. she keeps you guessing.

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stuart: the all new cadillac ats won north american car of the year, the detroit auto show. the redesigned cadillac earned the top prize for its style and design. this is the first time a cadillac won, and the fifth time for general motors overall. now, take a look at this one. chevy rolled out its newly-designed stingray last night at the show. the new stingray is the most powerful standard corvette in history. 450 horsepower. 0 to 60 in less than 4 seconds. this is a real american muscle car, and the first new version in nearly a decade. the completely redesigned stingray hits the lots next summer. don't know the price however. well, we have heard from the judge and art laffer on the

president and the debt ceiling. let's now talk to our next guest. what would happen, do you think? most of our people on the show so far say no the president will not invoke the 14th amendment he will not write himself a blank check. i want you to just imagine for one moment that he does do that. what's the reaction on the markets? >> well, actually it wouldn't surprise me. do you know what i think is a real shame about the fact that we're even having this discussion? congressional democrats want to avoid any discussion of spending cuts so much that they want to talk about well, let's find some obscure article in an amendment of the constitution just to avoid any discussion of entitlement spending. just to avoid any discussion -- discussion of spending cuts. this is a shame and it is a shame we don't have a functioning bond market that should be punishing our policymakers in washington. that should be happening right now. stuart: i agree with you. why do you say it is not a functioning bond market? why?

>> because the fed is going to stand there and let our congress make one bad decision after the other, and the bond market won't break because the fed is going to stand there and buy it. meanwhile, you have pseudoeconomists out there saying oh we've got to increase our deficit spending. by all means, pseudoeconomists, and you know who you are, give me an example in history when if you just run massive deficits, devalue your currency, suddenly success is right around the corner. it's a failed model. and we are absolutely making every mistake imaginable in the united states right now. we're on the wrong path. stuart: okay. so when we've gotten this past debt ceiling deadline, we've gotten past this and there's some kind of agreement and we don't cut spending and don't tackle entitlements, i don't think we will, what does the bond market do then? anything? >> no, absolutely not. the japanese government bond market it hasn't done anything in 20 years. the bank of japan is sitting there buying it.

stuart: they are going to spend even more, print more. >> absolutely, just print. stuart: very interesting stuff. come back and see us soon. >> thanks for having me. stuart: the nra made it easier for people to get to a shooting range. it released an app for the iphone called practice range it allows users to test virtual guns at a shooting range. it also gives legal resources and plenty of safety tips as well. hundreds of 2nd amendment advocates and gun control supporters took to the streets of gun show, demonstration and counterdemonstration. the organizers say despite all the protests, a record number of people showed up at that gun show. that as senator schumer sent letters to major gun retailers asking them stop selling assault weapons until congress discusses gun regulation. time for our next guest, he's the director of communications for gun owners of america. now, that's an organization that said, and i'm quoting directly now, gun control supporters have

the blood of little children on their hands. federal and state laws combined to ensure that no administrator, no adult had a gun at the newtown school where the children were murdered. joining us is larry pratt. mr. pratt sr. is ill with the flu so we're joined by his son. thanks for being here. >> thanks for having me. stuart: statements like the one made by your father, they feed public indignation they make an executive order getting around congress more likely. i think your organization has played into the hands of the gun control people. >> stuart, i totally disagree. this is all about never let a crisis go to waste as rahm emmanuel used to say. there is such a hypocrisy up here in washington where i'm

sitting right now, where in the 15 or so square block of capitol hill, there's 1800 capitol hill police to protect our congress, and yet how many armed adults are there to protect our schoolchildren. that's really -- stuart: i take your point, eric. i have heard the argument. but the statement that gun control people have the blood of little children on their hands. that is inflammatory. that is. >> here's why: adults are able to carry legally almost everywhere in this country. they can carry in most places to work. they can carry to supermarkets, stores, churches, in many cases, and yet if they're a public schoolteacher or administrator and they go to work, they're banned. they cannot carry there, and that's what -- you know, we didn't do this with our home. stuart, i don't care how antigun somebody is, they are not going to put a sign in front of their home saying there are no guns in this home. that's exactly what we have done

to our schools which makes them magnets now for criminals who -- they don't go to police stations. they go to the schools. stuart: i'm hearing you. your argument is valid. i think the language you used to back up that argument is a little over the top. let me put it to you like this, if everybody walk around with a gun all the time, do you think there would be less gun deaths? >> i can tell you where we've tried the opposite approach like in washington, d.c. where they banned guns it became the murder capit capital. i'm answering your question. like kennesaw georgia where they have mandated everybody to have a gun in their home and crime precipitously fell in kennesaw georgia. we couldn't say everybody has to own or carry a firearm but we would say if you are a law-abiding citizen, you have the right to do so. that's what at stake here where the white house is trying to insert itself and tell people what they can use, what they need or don't need, and we would

tell president obama and vice president biden, we have a bill of rights, not a bill of needs. stuart: at the end of the day, let's advance the argument. we hear from the vice president tomorrow. i think -- i think -- i would not be surprised to see the president use an executive order to go around congress, certainly in the area of universal background checks, for example. i think that is very likely to happen. and i think that you with what i'm calling an inflammatory statement may have encouraged public opinion to go so against you that they are for the president in this instance. >> stuart, with all due respect, i think that's ridiculous. i think they have been waiting for their opportunity. they did not campaign on gun control. but as rahm emmanuel used to say, you never let a crisis go to waste. sadly there was a tragedy -- look, my heart goes out to them. i have lost a child, stuart. so i know the pain. if i had a child in that school, i would have wanted a teacher or a principal to be able to stop that guy because that's the only

way you stop them. background checks didn't stop adam lanza from getting a gun. he stole them. stuart: i'm with you. i'm flat out of time. we appreciate you coming on the show. good to hear from you. >> thank you stuart. stuart: the ncaa proposes paying student athletes on top of their scholarships. do they deserve it? former college basketball and nba star joins the company. what does he think? he's next.

stuart: bradley, i know that name, their finance chief has resigned. we like to check the stocks of companies when their exhibit executives -- when their executives leave. bradley is down. i guess that means the exiting executive was pretty good. they are down 4%. 22 on vera bradley. they are also blaming weak sales because of the hurricane as well. more from the luxury markets. deutsche raising price target on coach. coach's shares are at 61.54. they are up there. fashion company fifth and pacific says its line reported weaker than expected sales. but the stock is up 10%. how about that. paying college athletes, the

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maybe you want to incorporate a business. orrotect your family with a will or living trust. and you'd like the help of an attorney. at legalzoom a legal plan attorney is available in most states with every personalized document to answer questions. get started at legalzoom.com today. and now you're protected. stuart: one last check of apple please. it dropped below 500 bucks a share earlier. nicole? nicole: i'm glad we're checking it because everybody really does own this in some way shape or form. right now it is at 504.89. that is much improved from the low of the day of $498 and change. so it did break below $500 for the first time in 11 months but back above those levels. stuart: you are right. everybody has a piece of it. anybody who invests in stocks

has probably got a very very small piece of apple. nicole, thank you very much indeed. 505 is where we are now. there's a push in college sports to paytudent athletes a stipend on top of their full ride scholarships. a retired nba basketball and founder and president of a youth organization, he's with us now. frequent guest on this program. lawrence, welcome back. good to see you. >> thanks for having me. stuart: i define a stipend over and above the scholarship as a limited amount of spending money, but it's new, and there's a push to pay college athletes this stipend. you're in the financial arena. do you approve of a stipend? let's start with that. >> like many big-time college athletes i was a top five recruit coming out of high school. grew up in public housing, on welfare, i didn't have 2 cents in my pocket. once you start paying players stipend, it is a slippery slope.

i have always advocated that players be compensated in an education outside of their sports in majors. what i mean by this, we have to set up a fund or something dedicated to help these guys, job skills, networking skills, financial life skills, personal development because really you're just contributing to a short-term deficit, but we know there's going to be many long-term problems down the road and these players will be unprepared. stuart: why not just pay them? i mean they are bringing in tens of millions of dollars for the colleges that they actually play for, whether it's football or basketball. why don't you just pay them? >> well, stu, once you start paying players, you think about the larger issue here. how much is enough? how do you make it fair? stuart: let the market decide. if alabama wants to pay its quarterback 5 million bucks a year, and he's bringing in the money to justify 5 million dollars a year, let him do. let the market decide. >> well, stuart, i think the larger point here and the issue

is what are we going to do to help these players long-term? stuart: pay them, what's wrong with paying them? you want to help them in the long-term. you pay them. if you want to give them advice on how to balance the checkbook when you are paying them 5 million dollars a year, go right ahead and do it. if you really want to help them, you pay them. >> how many guys are actually going to go pro? we need to do a better job of educating -- stuart: if you're paying them what they are worth, and they're bringing in millions of dollars, that helps them. >> this exacerbates of this whole issue of amateur versus professional. when we think about paying these guys, we're setting them up for failure down the road. money in and of itself is not going to solve the problems the athletes need. they need skills. you may pay them a stipend, but how much is enough? how is it going to be fair? you can't make it fair across the board. you have football, men's basketball, subsidizing really all the other sports. i think we need to address the

larger issue, to give these players the skills to succeed down the road. stuart: there's two sides of the fence here, i say the let market work, if you're bringing in millions, we will pay you what the market will pay you. you're saying no, don't do that, you are setting up failure, just give them a free education and teach them the life skills to deal with success later down the road. two sides of the fence; right? >> how much is enough? i think what it does is going to fuel the players thinking they are professionals when in fact they are supposed to be amateurs. this is a slippery slope. once you get started down that path, stu, there's no turning back. stuart: well, lawrence, i think we're on that path. i'm not sure we're ever going to be able to turn back. we always enjoy having you on the show. come and see us again. okay? >> thankses for having me. -- thanks for having me. stuart: you have ten seconds to make your point. charles: i typically -- i typically love lawrence but on this one i think he's wrong. the responsibility of balancing their checkbook is on them.

you can try to help them. they are not victims here. pay them what the market will pay and they will learn how to balance a checkbook or maybe they won't. stuart: several republican run states moving ahead with tax reform, should congress take a hint? they won't, but maybe they should. we will deal with it next.

stuart: while lawmakers in washington bickering over the debt ceiling, taxes and spending cuts, several states are acting on their own. louisiana, oklahoma, north carolina, kansas. they're all proposing at least changes to state income taxes. specifically getting rid of state income taxes and moving to sales taxes, consumption taxes. liz: they are showing the federal government how to do tax reform. what's really interesting is 37 of the 50 states the reason why this is happening is because one party control, one party control of the legislature and the governor. 37 out of the 50 states, that what's going on. stuart: 25 of those 37 are run by republicans, single party power within the state. 12 democrats. so you've got 25 states which could go for real tax reform. liz: real tax reform, that's right. what's interesting too north carolina is now talking about taxing services which would really hit the upper bracket

tremendously, like accounting. stuart: that's interesting. because the general thing is to go to a consumption tax which hits everybody as opposed to just based on income. liz: not just things -- stuart: do you think this will go places at the state level? charles: i really do. these value added type taxes they grow and grow. stuart: right again, charles payne. right again. and the highlight reel, short on time, it's next.

stuart: here it is the highlight reel. roll it please. >> two robbery suspects reportedly targeted a gun safe at a home that was identified in the paper. >> adults are able to carry legally almost everywhere in this country. >> i own a rifle. i own a handgun. they're registered. >> you're on the set of varney -- >> i don't care how antigun somebody is, they are not going to put a sign in front of their home saying there are no guns in this home. stuart: nra is not backing down